Question

Can you please answer for all three, Straight-line, Units-of-production, and Double-declining-balance

Assume Organic Ice Cream Company, Inc., bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $28,000. The estimated useful life was four years, and the residual value was $1,840. Assume that the estimated productive life of the machine was 10,900 hours. Actual annual usage was 4,360 hours in Year 1; 3,270 hours in Year 2; 2,180 hours in Year 3; and 1,090 hours in Year 4. Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Req 1C Complete a depreciation schedule using the Straight-line method. (Do not round intermediate calculations Year Depreciation Expense Accumulated Depreciation Net Book Value At acquisition $ 28,000 to $ 6,540 $ $ 2 es as as 6,540 6,540 6,540 6,540

Answer 1

Answer:

a) Straight line
Year	Depreciation expense	Accumulated depreciation	Net book value
at acquisition			28,000
1	(28000-1840/4) = 6540	6,540	21,460
2	6,540	13,080	14,920
3	6,540	19,620	8,380
4	6,540	26,160	1,840
b) Unit of production
Year	Depreciation expense	Accumulated depreciation	Net book value
at acquisition			28,000
1	4360*2.40 = 10,464	10,464	17,536
2	3270*2.40= 7,848	18,312	9,688
3	2180*2.40 = 5232	23,544	4,456
4	1090*2.40=2616	26,160	1,840
=(28000-1840)/10900 =2.40
c) Double decline
Year	Depreciation expense (50%)	Accumulated depreciation	Net book value
at acquisition			28,000
1	14,000	14,000	14,000
2	7,000	21,000	7,000
3	3,500	24,500	3,500
4	1,660	26,160	1,840
In Double Declining method we take the double rate than what we take in the straight line method
SO ,DDB rate is
=2 *(100/4)
=2 *25%
=50%